Should A Drug Development Team Ever Throw In The Towel?

Drug development is all about failure. It is the rule, success the rare exception. The extraordinarily high cost of drug development is largely driven by the high frequency of failures, and by the time and cost it takes to figure out the molecule you’re developing isn’t going to make it.

You don’t have to be an expensive management consultant to realize that it would be helpful for the industry to kill doomed projects sooner (though all have said it).

There’s just the prickly little problem of figuring out how to do this. While it’s easy to point to expensive failures and criticize organizations for not pulling the plug sooner, it’s also true that just about every successful drug faced some legitimate existential crisis along the way -- at some point during its development , there was a plausible reason to kill the program, and someone had to fight like hell to keep it going.

The question at the heart of the industry’s productivity struggles is the extent to which it’s even possible to pick the winners (or the losers), and figuring out better ways of managing this risk.

I was struck by two starkly contrasting approaches to this problem suggested by two of the smartest R&D thinkers I know – David Grainger, of Index Ventures, and Mike Gilman of Atlas Ventures. While both venture firms are known for their asset-focused biopharma investing approach, Grainger and Gilman offer very different perspectives on the role of project teams.

At the heart of Grainger’s view (described here, and reiterated in a recent email) is the view that a team with skin in the game is best positioned to assess a project’s success. Create very small, asset-focused companies comprised of team members who have each elected to bet years of their lives working on just this program, says Grainger, and they have real skin in the game. They will have the greatest visibility into both the opportunities and potential problems, and if it seems futile, they’ll want to pull the rip cord so they can devote their efforts to a more promising initiative. At its core, the idea is that folks involved in execution are also involved in deciding whether or not to proceed.

Not so fast, Gilman says. In his view (shared, most recently, at a BIO2014 panel in which we both participated), the job of a project team should be relentless execution. They should constantly try to find some way forward, some path that could lead to success. In his view, it’s not helpful for the team to constantly ask “should we or shouldn’t we.” That decision, he feels, should rest entirely with management (in the case of larger company) or investors (in the case of a startup); as long as resources are available, says Gilman, the team should look for success. Where there’s life, there’s hope.

What Gilman’s perspective speaks to is the very real challenge, perhaps impossibility, of contemplating and executing at the same time. As Rosenzweig has noted, there’s a lot of evidence suggesting that optimal performance requires disproportionate confidence in execution – an at-times unreasonable belief that you can achieve the nearly impossible.

Grainger doesn’t completely disagree; he also feels that a team should be relentlessly focused on execution – right up to the point where they stop believing it makes sense.

That’s the question: in drug development (and in the prosecution of projects more generally), is it better for the project team to own contemplation as well as execution?

The upside of owning contemplation is that you know everyone working on a project believes in it, and brings a distinctive level of passion and commitment – the sort of energy that’s typically associated with a startup, or with much academic research. The problem, of course, is that your ability to execute can be hampered by Hamlet-esque contemplation.

Teams focused solely on execution tend not to suffer from the Hamlet problem, and in general are regarded as more professional. It’s unquestionably what most companies, and especially companies of any significant scale, are looking for. It’s also, frankly, what I think you find in most large companies, especially among the employees who’ve stuck around the longest. You are given a task, your job is to do it (and not complain about how it doesn’t meet your expectations for self-actualization).

I’ve seen examples of execution focus leading to incredible results – results that exceeded the original expectations of the team, and might not have been achievable if the team voted, rather than executed. On the other hand, engaged doesn't mean productive -- consider Colonel Nicholson leading his men to build a bridge for the enemy in the 1957 classic The Bridge On The River Kwai. Finally, most of us are also familiar with the death march, the experience of being stuck executing a project that seems hopeless or pointless; this can be soul-crushing.

Does empowering a team to make go/no-go decisions lead to better choices during drug development?

The answer likely depends upon context. The success of an execution-focused team would seem to reflect the quality of oversight; with poor supervision, such teams can rack up huge costs without doing the organization very much good. On the other hand, unless teams empowered to make decisions are able to suspend disbelief long enough to give difficult projects a chance, they may make little headway, and flit from project to project.

It’s also possible that the locus of decision-making isn’t an especially key factor in drug development; perhaps success depends to a far greater extent on luck; because you can construct a narrative around fortunate teams doesn’t mean you understand or can replicate their success.

Perhaps the more interesting question is what sort of team you’d prefer to be on. It’s tempting to phrase this question as passion versus professionalism, and I think that’s an important component. But I’m constantly surprised by how many people I know who are able to enjoy execution excellence in its own right – who are able to experience the satisfaction of a job well-done, and not worry whether or not it’s part of an effort to change the world and dent the universe. It’s a different type of passion, perhaps -- about process, not outcomes – but deeply felt, and personally meaningful.

For me, the framing remains vitally important – I want to work on projects that I see as transformative and impactful. As much as I viscerally enjoy execution, it’s essential for me to believe in the underlying objective.

I also don’t think I’m alone; I suspect even some of the most jaded, most professional drug developers in the industry would up their game in the context of an especially inspiring opportunity. There is remarkable potential here waiting to be tapped.

Addendum (added shortly after original post):

There is fascinating follow-up, via Twitter, from both Grainger (@sciencescanner) and Gilman (@michael_gilman), who each emphasize their sense that they agree more than they disagree. (I edited the following slightly for legibility, given constraints of Twitter format.)

Says Grainger, “The key is having individuals doing what they are best at (execution, decision-making or both) and incentives aligned. Arguments against team executing and investors making kill/continue decision are misalignment and miscommunication. If the same people are executing and deciding, incentives can’t be misaligned and knowledge should be absolute.”

He adds, “Don’t forget the other key point: human nature is unwittingly biased towards ‘continue at all costs.’ We need to do everything possible to counter this bias and promote kill decisions. Industry is robust against false negatives (wrong kills) but destroyed by false positives (wrong continues)."

According to Gilman, “My main point is that the greatest creativity is found when your back is against the wall and your very existence is at stake – which is why startups can innovate in ways the big companies can’t. They basically have no choice. This issue came up when I went back to Biogen, and took on the challenge of trying to get program teams there to act like entrepreneurs – a challenge at which I failed, by the way. But my strategy, such as it was, was to change the culture of these teams to promote innovation. Then, step two: take on the portfolio process, which is really the deeper problem, where the industry consistently reverts to the mean.”